SUNBIZ

A Whole New Industry Is Opening In Fiji

John Ross is  a Nadi-based marketing and advertising specialist with a long background in tourism. For feedback on this article, please email him: johnrossfiji@gmail.com     Retirement villages are precincts
25 Mar 2017 11:00
A Whole New Industry Is Opening In Fiji
Denarau Island, Fiji.

John Ross is  a Nadi-based marketing and advertising specialist with a long background in tourism. For feedback on this article, please email him: johnrossfiji@gmail.com

 

 

Retirement villages are precincts that have been purpose built to provide housing and support for elder citizens.

This is not a recent concept but over the last ten years in Australia it has been a rapidly growing segment of the property market and is now a multi-billion dollar industry.

When the concept was first introduced to the market it was most often managed by a charity or religious group, but the potential for profit is so good that it started to attract corporations and specialised companies who bought changes to the sector, created awareness of the value the retirement village concept brings and, maybe most importantly, changed the image to the role of the village from  place where old people go to wait to die to an interesting and vibrant place for more mature people to live and engage in a big range of recreational activities at an affordable cost.

This is the image most Australians (of any age) now have of the concept.

This image shift not only encourages the mature and primary target audience of people fifty five years of age and over to consider a village property, it removes the penalty of guilt previously placed on the younger generations who needed to put aged relatives into a home.

Entry to a village is now an acceptable housing alternative that provides positive lifestyle benefits to the aged not available in a normal suburban setting.

The concept changed dramatically the old establishment where aged people lived in a very communal way and were looked after by trained carers to a totally different proposition.

The person now buys a unit in the village which they own.

They pay a commercial rate to purchase the property and the price includes an amount, called a deferred management fee or DMF, which pays the operator of the village to manage it, ensure things like maintenance and common area upkeep are to standard, and make available additional services that may be required by the unit owners.

The most common means of ownership is leasehold on a strata title basis of a designated area. An incoming fee is paid on entry and when the owner sells the fee is repaid less the DMF.

In many cases the capital gain on the sale is split between the owner and the management company. In other words, the owner gets the cost of buying the property back, less the cost of management for the period.

The properties now are designed as stand-alone units similar to a home unit property but with three significant advantages.

The cost of purchase is generally lower than comparable units in the area, all concerns of managing the property are handled by a professional management group and additional services are available on site, although these have to be paid for separately at the time of use.

These services will usually include on-site medical and nursing services as well as access to other health services such as dental, optical, exercise and pharmaceutical units.

In many villages there is also the option of having food prepared and delivered to the unit.

For a growing number of aged people the retirement village concept has great appeal and the number of property owners in the village is growing fast.

In Australia there are now around a hundred and ninety thousand residents, representing six and a half percent of the over sixty-five age group.

The Australian government does not provide any subsidies for the development of retirement villages; they are totally self-funded by the residents.

The normal practice is for a developer to build a village complex and either provide a management structure and sell off the individual units or appoint a separate management group.

The developer makes a profit from the construction and the management is financed out of the DMF, which includes a profit component.

Fiji is an attractive location for retirement villages.

The climate and environment are excellent and there is a very high level of personal security.

Foreigners are welcome to purchase property in Fiji, subject to some limitations and the legal framework for ownership simple and secure.

One of the critical issues with retirement accommodation product is the need for readily available quality medical services and this is lacking in Fiji.

This is about to change with the proposal from BSP Life to develop a world class hospital on Denerau Island.

The hospital will be basically founded on medical tourism but will be, according to reports, available to locals, although the fees will be high.

This would not be an issue for the types of people who purchase retirement units so the way is now open for the retirement village industry to start in Fiji.

This segment has proved very profitable in Australia and New Zealand and some research carried out several years age indicated that there would be a strong market for Fiji retirement properties.

One of the attractions highlighted in the research was that the weather in Fiji which would allow the owners to avoid the cols withers in the two main source markets, with the possibility of spending time in both Fiji and the home country.

The short flight times and the cheap airfares were also adding to the attraction of the concept.

Fiji would benefit significantly from the development of this section of the market as the owners would buy the units, paying all the local taxes and fees, would spend well on living expenses and the complexes would provide well paid jobs for the local staff in the operations of the facilities.

The people who buy into the complexes will be middle to high income earners and have an active lifestyle so their money will be spread through the community.

There are already several experienced Australian operators considering Fiji as a potential expansion area and the hospital availability may just be the last requirement to drop into place and make this possible.

 



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